In addition to providing access to working capital, sale-leaseback transactions are popular among business owners for a number of other reasons.
1) Continued Use. You get to keep using your equipment and generating revenue while harnessing more capital!
2) Potential Income Tax Benefits. Like most leases, a sale leaseback offers tax advantages that traditional financing cannot. Over the course of the lease you might even be able to write off 100% of the payment!
3) No Extra Collateral. Unlike traditional back financing, collateral is usually not needed for sale leaseback agreements. The equipment itself becomes built in collaterals and valuations are relatively fast and simple!
4) Tailored Payments. Like all leases, payments can be tailored to meet your cash flow, including fixed step or seasonal payment schedules.
5) Preserve lines of credit. Your lease payments won’t interfere with bank credit lines, allowing you to preserve these funds for other business priorities.